Can we use a non-Member to perform our CIP duties for us?

A Member may delegate some or all of its CIP duties to a third party service provider as long as there is a written agreement with the third party service provider that outlines its responsibilities. The FCM or IB remains solely responsible for ensuring compliance with CIP requirements, so the firm should activily monitor the delegation to ensure that the CIP procedures are being conducted effectively.

An FCM or IB may also enter into a reliance agreement with another financial institution where the FCM or IB relies upon the other financial institution to conduct some or all of its CIP. The FCM or IB will not be held responsible for the other financial institution’s failure to adequately meet the CIP obligations if 1) the FCM’s or IB’s reliance is reasonable under the circumstances; 2) the other financial institution is subject to an AML compliance requirement under the Bank Secrecy Act and is regulated by a Federal functional regulator; and 3) the other financial institution enters into a contract with the Member requiring the other institution to certify annually to the Member that it has implemented an AML program and that it will perform the specified requirements of its own CIP.

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